Energy Benchmarking Picks Up Steam in the US

Like our youth-obsessed culture, the Dexter Horton building in downtown Seattle has something of a complex about getting old. To keep up with younger whippersnappers, the managers of the historic building have been benchmarking and rating its energy performance for several years to help stay competitive. Starting this month, all other commercial buildings over 10,000 square feet in Seattle will have to follow suit.

Seattle is just one of a handful of large U.S. cities and states to enact energy efficiency benchmarking legislation in large buildings, and many of the programs go into effect this year. The efforts are far behind those of the European Union, which has required all 27 member states to certify and disclose energy usage in large commercial buildings for nearly a decade.

The different styles of benchmarking -- which vary between locales -- will allow cities to gather better data on a sector that usually consumes the bulk of overall energy. New York City estimates 75 percent of the city’s carbon emissions stem from energy used in buildings -- and today’s buildings will still make up 85 percent of the real estate in 2030.

“In a couple of years, the markets will have time to respond to these policy initiatives, and cities having access to this information -- it is a game changer,” said Andrew Burr, Director of the Building Energy Rating Program for Institute for Market Transformation (IMT), a non-profit that works to promote energy efficiency and green building.

Of the five cities that have active legislation, only New York City, San Francisco and Washington, D.C. will require buildings to disclose the information on a public website. San Francisco and Seattle require the information to be given to buyers, lessees or lenders. In Austin, the information only has to be disclosed to buyers.

Bringing the information into the point of sale not only allows for transparency, but is also the first step in monetizing efficiency and increasing the value of retrofits. “With existing buildings, people are becoming more aware that it’s still something of a black hole for actually saving energy,” said Burr.

It’s not that retrofits can’t save money, but with commercial buildings, there is often a gap between the stakeholders -- tenants use the electricity but owners pay for the upgrades. The result is that building managers don’t always look at energy as an opportunity and there is often a question of who will pay the high upfront costs of retrofits.

(At a panel on May 25, Greentech Media, Solar One and New York City Accelerator for a Clean and Renewable Economy (NYC ACRE) at Polytechnic Institute of New York University will look at value of a negawatt -- and what that word even means to different stakeholders -- both in New York City and beyond. To register, visit Clean Energy Connections.)

Burr argues that, ideally, there are far more stakeholders that could use this information, and therefore having a public website and transaction-based disclosure is the most valuable solution. With public disclosures, everyone from reporters, investors, public organizations and bankers can access the information.

Once the public databases are filled -- in the case of New York City, it will have information for nearly 2.5 billion sq. feet of space -- it can be used to target low-performing buildings. In San Francisco and New York City, there are requirements for audits along with the benchmarking. That will help open the market for lighting and HVAC upgrades. When the legislation is done right, Burr says that creates jobs while costing the city very little. “Rating and disclosure are really market mechanisms, like miles per gallon,” he said, “that’s a pretty inexpensive policy.”

Nine other states are currently putting together laws that would require energy rating and disclosure; however, only Massachusetts is debating the creation of a public website, according to IMT. Although tracking the information is a step in the right direction, if it never gets into the market, it could be a missed opportunity. “The onus is on the building owners,” said Burr, “and the policy will be as effective as the market makes it.”